Market Update – August 23/2022

Written by Stuart Cowell

USDIndex pushed to 20-yr highs over 109.00 (August low 104.5) and pressured EUR (under parity with Energy concerns weighing) & GBP (under 1.1750 with political and energy concerns weighing too).  Stocks tanked across the board (NASDAQ -2.55%) and Yields rallied (+1.78%) with the 10yr holding over 3%, and the yield curve still 30+bp inverted. Asian markets followed through too, (Hang Seng -0.81%, Nikkei -1.20%) and European FUTS are lower. Oil gyrated over $4.70, after Saudi Energy minister said they may have to CUT production. Gold down again, holds at $1735 and BTC broke under $21k now.

Overnight – PMIs miss – AUD Services under 50.0 and contracting at 49.6 vs 54.0, JPY Manufacturing 51.0 vs 52.1, BOJ Core CPI, hotter 1.8% vs 1.5%. 

Week Ahead – Jackson Hole 25-27, Global PMIs from 23/8, US Durable Goods  24/8, US & German  GDP 25/8 & US PCE 26/8. Wednesday (24/8) – 6-mths. since Russia’s invasion of Ukraine.

  • USDIndex continued to rally; above late 2002 highs, and trades at 109.15. EUR and GBP weaken as winter energy crisis looms.
  • Equities – USA500 closed down 90.50pts (-2.14%) to 4137, US500FUTS at 4122 now Tech leading the decline & Meme stocks in play again (AMC -41.95%, NFLX -6%, Ford -5.04%).
  • Yields 10-year yield rallied to 3.037% into close and trade at 3.0165% now.  The 2/10yr. yield curve cooled but remains inverted by 29.95 bp.  
  • Oil – dropped to $86.24, before recovering to $90.95 now, following comments from SA Energy minister. 
  • Gold – remains under $1750 today at $1736 now, having tested into $1725 support area yesterday. 
  • Bitcoin pressured and down to $21k now.
  • FX Markets – EURUSD down under parity at 0.99040 now. USDJPY rallied to 137.70 earlier and trades at 137.20 now. Cable tanked under 1.1750 and trades at  1.1725 now.

Today – UK & US Flash PMIs, EZ Consumer Confidence, US New Home Sales, Fed Discount Rate Minutes, Speech from ECB’s Panetta.

Biggest FX Mover @ (06:30 GMT) EURJPY (-0.57%). Rejected  138.00 yesterday and under 136.00 now. MAs aligning lower,  MACD histogram negative & signal line falling, RSI 23.36 OS & falling, H1 ATR 0.212, Daily ATR 1.37.

About the author

Stuart Cowell

With over 25 years experience working for a host of globally recognized organisations in the City of London, Stuart Cowell is a passionate advocate of keeping things simple, doing what is probable and understanding how the news, charts and sentiment work together to provide trading opportunities across all asset classes and all time frames.